Blockchains represent a further step taken to a more technologically advanced world. The admirers of blockchains include eminent personalities like Richard Branson and Bill Gates.
The utilities of this new technology are far extending digital currencies. Owing to this, banks and insurers are competing with each other to be the first ones to have blockchain experience.
What is a blockchain?
Blockchain is a technology that facilitates direct connection of the consumer and supplier, eliminating the role of third parties like banks and other exchange institutions.
A network of nodes constitutes the blockchains. It is a decentralized technology. It offers many types of securities to the users including transparency and incorruptibility.
How do blockchains work?
- Suppose X wants to transfer money to Y/
- This transaction including money will be represented as a ‘block’ online.
- This block is then broadcasted to every party available in the online network.
- All the parties in the network approve the transaction as valid.
- The approved block then becomes part of the blockchain, characterized by absolute transparency and incorruptibility.
- The transaction now gets completed and the money gets transferred from X to Y.
Why are blockchains considered revolutionary?
Blockchains will help you undertake all types of transactions- dealing in property, goods, and money obviously. The possibility of frauds is absolutely removed, as there is record of each and every transaction on a public ledger.
The risks and challenges faced by blockchains
We still do not have complete information of the extent of security that blockchains offer. There might have been some crept in flaws which could be taken advantage of by hackers and viruses.
Apart from these technological issues, there are also some social issues coming in the way of wide acceptance of blockchains. In some ways, it is difficult to compensate for benefits that banks and other third parties were actually performing.
The extent of public interest shown by the people determines the level of development and advancement in blockchains. Only time will show us if and when blockchains will be able to stay on the surface despite of these hurdles.